The startup entrepreneur scene in Phoenix just keeps getting hotter.
And, investors from all around the region are starting to take note as was evidenced at the recent Invest Southwest "VC's Unplugged" event held 5/20/15 at mod in downtown Phoenix.
Invest Southwest, the organization behind Venture Madness, rounded up a robust panel of venture capitalists from the Rocky Mountain Venture Capital Association. With VC's in attendance from Access Venture Partners, Epic Ventures, Galvanize, Grayhawk Capital, Iron Gate Capital, Mercato Partners, Pelion Ventures, Point B Capital, Sun Mountain Capital, and Techstars there was over $500 million in venture capital represented at the event.
About the Investors
Each panelist detailed their specific focus and explained how important it is for entrepreneurs to do their research and understand the motivation behind each firm's investment profile and strategy. For the most part, those in attendance generally favored technology solutions and said they often steer clear of product based companies or those that require heavy R&D investment before being able to get legal approvals. But, they also noted that the reputation and track record of the entrepreneur and team behind a company can sway decisions in surprising ways. They encouraged entrepreneurs to remember that a "no" is often simply the result of a mismatched fit or bad timing, so identifying the right partner is crucial.
Importance of Community
The panel was very open, honest and even compassionate. Ari Newman of Techstars was particularly vocal throughout the evening and he made a point to say he understands that entrepreneurship can be a "really lonely job." The panelists credited a certain amount of the success that communities in Colorado have had to their tight-knit community and to the fact that they are so good at sharing each other's success stories. The panelists also noticed that many of our neighboring states that have had great success in increasing access to capital available for funding have done so by working with institutional partners. It was generally agreed that Arizona hasn't yet built in that portion of funding and that the community would benefit greatly from doing so.
It was refreshing to hear the panelists admit that they understand how confusing the world of obtaining funding is for entrepreneurs since the roles of each stage investor and each individual investor's processes and preferences can vary greatly. They were each clear on the point that they generally leave it up to angel investors to do seed rounds of funding and that they look for a startup to have a solid product and proven traction in the market before they want to get involved. But, they also admitted that with the right, well-proven entrepreneur they occasionally get involved much earlier. When asked how they find their deals they were very open about the fact that they find deals largely through trusted referrals and stressed the importance of entrepreneurs getting out into the community to get to know key people and gain visibility.
Perhaps the best part of the evening for those of us in the Phoenix community was to hear these out of state investors report that their general thought toward Phoenix is that it is "a gem" - that our mix of affordable living, excellent government partners, support resources and collaboration spaces, enthusiastic community members and clear zest make Phoenix a very attractive place for startups to grow and for investors to get more involved. They suggested that perhaps the missing link is simply in our need to get more active promoting the work that is being done and to ensure visibility.
To that, we say: #yesphx
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